WEBVTT - Intel Falls as Manufacturing Snags Bedevil Comeback 0:00:02.520 --> 0:00:12.880 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:12.920 --> 0:00:16.720 from coast to coast with Caroline Hide in New York 0:00:17.040 --> 0:00:19.599 and ever though in San Francisco. 0:00:23.560 --> 0:00:26.639 This is Bloomberg Tech coming up. Intel plunges after the 0:00:26.720 --> 0:00:29.880 chip maker warned its struggling with manufacturing problems. 0:00:29.960 --> 0:00:33.080 Fas China's largest tech firms get an initial green light 0:00:33.159 --> 0:00:36.640 from Beijing to start preparing orders for videos two hundred. 0:00:36.360 --> 0:00:39.879 AI chips, and after years of drama comes to an 0:00:40.000 --> 0:00:43.120 end as TikTok and its Chinese parent Byte Dance close 0:00:43.159 --> 0:00:45.280 a deal to operate in the US. 0:00:45.880 --> 0:00:48.640 Let's look right now though at US markets as we 0:00:48.720 --> 0:00:52.040 close up this week, a volatile training week to say 0:00:52.040 --> 0:00:55.480 the very least consumed by geopolitics to start, and we 0:00:55.600 --> 0:00:57.280 end with a little bit of green on our screens. 0:00:57.280 --> 0:00:59.520 For the nasat one hundred, we're up five ten percent, 0:00:59.600 --> 0:01:02.440 six tenths. You can see the clallback that happened post 0:01:02.520 --> 0:01:07.000 Davos speech and post President Trump really taking his line 0:01:07.000 --> 0:01:09.480 of sight away from Greenland by force at least. But ed, 0:01:09.520 --> 0:01:11.319 it's all about the chip stocks today and you're digging 0:01:11.319 --> 0:01:11.959 into them. 0:01:12.520 --> 0:01:15.679 So Intel is down a lot, and it's because of 0:01:15.760 --> 0:01:17.880 a sales outlook for the current period that at the 0:01:17.920 --> 0:01:21.639 midpoint was below investor expectations, on track for its biggest 0:01:21.680 --> 0:01:24.720 drop since August of twenty twenty two. But remember this 0:01:24.880 --> 0:01:27.319 was a stock that just in the few weeks we've 0:01:27.319 --> 0:01:30.480 had of twenty twenty six, was up forty seven percent 0:01:30.840 --> 0:01:34.600 as of yesterday's close. The problems are in supply, but 0:01:34.720 --> 0:01:38.759 specifically in execution. Let's get to Bloomberg's chips reporter Ian 0:01:38.880 --> 0:01:41.479 King and Ian You and I spoke with Intel's CEO 0:01:41.560 --> 0:01:45.880 Lit Bhutan on the telephone. He was very clear that actually, 0:01:45.959 --> 0:01:48.680 when they say there are supply issues, a lot of 0:01:48.720 --> 0:01:51.280 this was how Intel tried to manage it. They have 0:01:51.440 --> 0:01:54.440 yield and they have production problems. Explain that to us. 0:01:55.200 --> 0:01:57.280 Yeah, So those are a couple of things here. The 0:01:57.320 --> 0:02:01.960 first was that they basically did believe that the demand 0:02:02.160 --> 0:02:04.240 for some of their best products, which would be the 0:02:04.240 --> 0:02:05.120 server chips. 0:02:05.040 --> 0:02:05.360 Was there. 0:02:05.760 --> 0:02:08.920 Didn't build inventory, didn't assign supply to that, so that 0:02:08.960 --> 0:02:11.920 didn't help. But then the production, which could help you 0:02:11.960 --> 0:02:14.359 out where you get more chips for a production room, 0:02:14.440 --> 0:02:17.200 what's called yield. If that had been better, they would 0:02:17.200 --> 0:02:19.200 have had more chips and been able to meet more supply. 0:02:19.360 --> 0:02:22.920 So they've really left quite a lot of orders on 0:02:22.960 --> 0:02:25.400 the table here and obviously that is not good. 0:02:25.720 --> 0:02:27.919 What does it say about the future of its fab 0:02:28.200 --> 0:02:30.640 business in if you're a solo. 0:02:31.280 --> 0:02:33.560 Well, I mean, I can refer you to what the 0:02:33.560 --> 0:02:35.840 analysts has said, which is, look, if you're out there 0:02:36.240 --> 0:02:41.600 looking for external customers for your factories, your factories have 0:02:41.720 --> 0:02:44.560 to be showing their best side. They have to be 0:02:44.840 --> 0:02:47.840 operating at full of you know, best they can. They 0:02:47.880 --> 0:02:50.919 have to be working, you know, a maximum efficiency. If 0:02:50.960 --> 0:02:54.920 that's not the case, then that obviously hurts your you know, 0:02:55.000 --> 0:02:57.080 your sales pitch to outside customers. 0:02:58.400 --> 0:02:59.760 Intil Intel. 0:03:00.440 --> 0:03:04.160 We also discussed in the context of Intel his efforts 0:03:04.200 --> 0:03:08.360 with the coming fourteen A process right, and I found 0:03:08.440 --> 0:03:12.280 lit Bhutan's candor quite interesting. We tried to push them 0:03:12.320 --> 0:03:14.760 and say where are the customers and his answer was 0:03:14.840 --> 0:03:17.240 until I have a volume commitment on that, I'm not 0:03:17.240 --> 0:03:19.160 going to tell you anything. Just give us a bit 0:03:19.160 --> 0:03:21.880 more of how he tried to explain that foundry business 0:03:21.880 --> 0:03:22.600 in its progress. 0:03:23.480 --> 0:03:25.959 Yeah, I mean, this is him sticking to a line 0:03:26.919 --> 0:03:30.120 of kind of reasoning which I think resonated initially with 0:03:30.200 --> 0:03:32.480 shareholders and then caused a little bit of concern. Basically, 0:03:32.520 --> 0:03:36.640 he's saying, look, this is really expensive building these factories 0:03:36.800 --> 0:03:39.800 and equipping them past the fortune I am not going 0:03:39.840 --> 0:03:43.200 to do that until my customers say, here's an order 0:03:43.400 --> 0:03:46.120 that I can then turn into cash that pays for 0:03:46.160 --> 0:03:48.840 these factories. So that's a very logical, sort of down 0:03:48.880 --> 0:03:54.120 to earth, pragmatic sort of viewpoint, saying that he'll know 0:03:54.360 --> 0:03:56.440 for sure whether he's going to get concrete orders or 0:03:56.480 --> 0:03:58.960 not in the second half of this year and into 0:03:59.040 --> 0:04:02.320 the first half of net. So from the Wall Street perspective, 0:04:02.360 --> 0:04:04.280 that's like we're still in the kind of wait and 0:04:04.360 --> 0:04:07.560 see period in terms of whether Intel can become this 0:04:07.720 --> 0:04:10.680 kind of boundary this rival to TSMC. 0:04:11.440 --> 0:04:15.040 Wonder how the administration is viewing it as a key 0:04:15.080 --> 0:04:19.400 stakeholder in Intel in king great roundup, Thank you, Let's 0:04:19.400 --> 0:04:22.040 turn attuch to a Bloomberg exclusive. Now, Ali Baba ten 0:04:22.520 --> 0:04:25.279 Fighte Dance were then now allowed to prepare orders for 0:04:25.320 --> 0:04:28.680 Invideo's h two hundred AI chips, suggesting that Beijing is 0:04:28.720 --> 0:04:32.160 prioritizing the needs of the major Chinese hyperscalers again close 0:04:32.200 --> 0:04:35.840 to formally approving imports of essential AI components. Let's get 0:04:35.839 --> 0:04:39.440 to bloomog Tech executive editor Peter Elstrom, it's another stepping 0:04:39.480 --> 0:04:41.719 stone that hints Beijing I'll. 0:04:41.600 --> 0:04:42.000 Let them in. 0:04:43.920 --> 0:04:46.039 Yeah, this is a very closely watched drama. 0:04:46.120 --> 0:04:48.640 Of course, Nvidia used to sell lots of AI chips 0:04:48.640 --> 0:04:52.160 into the China market, but Washington and Beijing have been 0:04:52.200 --> 0:04:54.800 battled over exactly what kind of chips are going to 0:04:54.839 --> 0:04:57.799 be sold and what kind of volume. Washington has stopped 0:04:57.839 --> 0:05:00.960 the most advanced chips from go into the market, but 0:05:01.000 --> 0:05:03.840 the Trump administration did approve these age two hundred chips 0:05:03.880 --> 0:05:06.120 to be sold into the market. It wasn't clear whether 0:05:06.200 --> 0:05:09.080 Beijing was going to let its tech companies buy these chips. 0:05:09.080 --> 0:05:12.120 Now now what we're hearing from sources is that they 0:05:12.560 --> 0:05:15.919 have given the go ahead for the key companies you mentioned, Alibaba, 0:05:15.920 --> 0:05:18.320 ten Sent and byte Dance to prepare their orders, to 0:05:18.400 --> 0:05:21.200 tell them how much they want to buy from Nvidia, 0:05:21.320 --> 0:05:23.400 and then they're going to make decisions about when exactly 0:05:23.440 --> 0:05:24.800 this is going to happen. It's going to come with 0:05:24.839 --> 0:05:27.120 some caveats. They do still want to build up the 0:05:27.160 --> 0:05:30.040 domestic industry. They want these companies to also purchase from 0:05:30.080 --> 0:05:33.400 some of the domestic players, which include Wallwe technologies and 0:05:33.440 --> 0:05:35.320 camera con as we've talked about in the show a 0:05:35.320 --> 0:05:37.479 few times before. But it looks like they're going to 0:05:37.480 --> 0:05:39.400 be able to go ahead with those Age two hundreds. 0:05:39.880 --> 0:05:43.560 Yeah, those caveats also include restrictions, right that on both 0:05:43.600 --> 0:05:47.680 sides of this negotiation, there is agreement that the Chinese 0:05:47.760 --> 0:05:51.120 officials that we're hearing from talking about there will not 0:05:51.240 --> 0:05:54.200 be access when it comes to sensitive industries things like that. 0:05:54.320 --> 0:05:57.680 Just break that down, Peter. Yeah, they're concerned. 0:05:57.760 --> 0:06:00.680 They've said this before with the chips and now the 0:06:01.000 --> 0:06:01.920 two hundred chips. 0:06:02.040 --> 0:06:02.760 They're concerned. 0:06:02.800 --> 0:06:06.440 They don't want invidious chips going into sensitive areas like 0:06:06.520 --> 0:06:11.080 the military, like state on enterprises or government agencies for 0:06:11.120 --> 0:06:13.360 that case. So the market's going to be narrower than 0:06:13.400 --> 0:06:16.800 what it would be otherwise. But in Vidia used to again, 0:06:16.880 --> 0:06:18.560 used to sell a lot of chips into this market, 0:06:18.680 --> 0:06:21.600 used to be very very important. Jensen Wong has talked 0:06:21.600 --> 0:06:23.680 about how important it is, and they know that there's 0:06:23.760 --> 0:06:25.880 demand there for these chips, so he'd like to get 0:06:25.920 --> 0:06:28.400 back in. And I think this is not the Age 0:06:28.440 --> 0:06:30.280 two hundreds are not the end of the game here. 0:06:30.600 --> 0:06:33.160 We know that some people in the Trump administration included 0:06:33.200 --> 0:06:36.520 David Sachs have advocated for selling even more in video 0:06:36.600 --> 0:06:39.560 chips into China, and so we think that if this 0:06:39.760 --> 0:06:42.159 is going to move ahead, it's more symbolic of what 0:06:42.200 --> 0:06:45.720 the broader potential is in China for in video if 0:06:45.720 --> 0:06:46.599 they can make this happen. 0:06:47.520 --> 0:06:49.960 Bobergs, Peter Elstrom, thank you very much. Let's get more 0:06:49.960 --> 0:06:53.080 on that story. Joanne Feenie, partner and portfolio manager and 0:06:53.200 --> 0:06:55.800 Advisors Capital Management, long time. 0:06:55.560 --> 0:06:57.480 Coverage of the chip industry. 0:06:57.839 --> 0:07:00.200 Now on the buy side of the table, Joe, and 0:07:00.279 --> 0:07:03.680 you yourself owned some Nvidia. I feel like we've discussed 0:07:03.680 --> 0:07:06.560 different shades of this story many times over on this 0:07:06.680 --> 0:07:10.040 program with you. But at this point, at this juncture, 0:07:10.320 --> 0:07:12.720 and based on the reporting that Peter just gave us, 0:07:13.280 --> 0:07:16.960 do you start to model in some upside for Nvidia 0:07:17.080 --> 0:07:20.480 in the China market and thus think about your positioning 0:07:20.520 --> 0:07:21.200 on that stock. 0:07:22.560 --> 0:07:25.840 Yeah, clearly it's a good sign, right, and it's been 0:07:25.920 --> 0:07:29.320 long and coming, but you know, the size of the 0:07:29.360 --> 0:07:33.840 market opportunity is still hard to define. You know, clearly 0:07:34.080 --> 0:07:37.640 China wants to encourage its own semiconductor industry to catch 0:07:37.720 --> 0:07:39.600 up to some degree to in Vidia. 0:07:39.680 --> 0:07:41.920 But you know, it's a good sign. It's incrementally positive. 0:07:41.920 --> 0:07:43.600 We're not really going to model it in at this 0:07:43.640 --> 0:07:47.440 point because it's hard to know how large it could be. Nevertheless, 0:07:47.680 --> 0:07:51.280 a positive sign opening up that market, and also just 0:07:51.440 --> 0:07:55.240 to you know, continue to make sure, as Jensen Wang 0:07:55.240 --> 0:07:58.680 has put it, that AI applications are built on the 0:07:58.960 --> 0:08:02.480 US technology stat primarily, and because we have the leading 0:08:02.520 --> 0:08:03.400 ships that's appropriate. 0:08:04.480 --> 0:08:06.840 As Jensen one has put it, it's a fifty billion 0:08:06.880 --> 0:08:09.600 dollars per year market opportunity if they can go back 0:08:09.600 --> 0:08:12.120 to China, which is currently a net zero assumption. That 0:08:12.240 --> 0:08:14.080 last bit you said, I really want the joe An 0:08:14.120 --> 0:08:17.720 Foinie take on this. In the White House, the consideration 0:08:18.080 --> 0:08:21.239 was if we don't sell any technology deprecated or otherwise 0:08:21.280 --> 0:08:24.400 into China, then there will be a vacuum which the 0:08:24.480 --> 0:08:27.640 Chinese domestic players will occupy. But there is still this 0:08:27.800 --> 0:08:31.480 national security and competition standpoint. Where do you stand on that? 0:08:33.040 --> 0:08:35.960 Yeah, I'm not a military expert, ed, so I'm going 0:08:36.040 --> 0:08:39.640 to refrain from from talking really about how this could 0:08:39.720 --> 0:08:42.040 change the military, you. 0:08:41.960 --> 0:08:43.319 Know, competitive situation. 0:08:43.920 --> 0:08:46.960 You know, if we don't sell these chips, if Nvidia 0:08:47.000 --> 0:08:49.319 doesn't get to tell these sell these ships, China will 0:08:49.360 --> 0:08:53.520 develop them and they've worked around the you know, less 0:08:53.520 --> 0:08:56.840 capability of their own chips by redesigning you know, inside 0:08:56.880 --> 0:08:59.280 the rats to try to save energy, to try to. 0:08:59.200 --> 0:09:01.600 Boost through put it. And they'll continue to do that, 0:09:01.760 --> 0:09:03.440 and they'll do that in AI applications. 0:09:03.480 --> 0:09:05.600 They are going to do that in military applications, whether 0:09:05.679 --> 0:09:07.560 or not they can use those Nvidia chips there. So, 0:09:08.160 --> 0:09:11.640 you know, I think that the opportunity for US to 0:09:11.720 --> 0:09:15.920 have more sort of input and potential control over the 0:09:15.920 --> 0:09:19.240 future of this AI technology is really a worthwhile goal. 0:09:20.080 --> 0:09:24.320 The administration looking at h two hundreds, the administration probably 0:09:24.640 --> 0:09:27.760 looking at the share fall of Intel today, Joanne, take 0:09:27.840 --> 0:09:32.960 us to your thoughts on the manufacturing well, lackluster performance 0:09:33.000 --> 0:09:34.679 thus far from the company, it seems. 0:09:35.160 --> 0:09:37.680 Yeah, I mean until Caroline has certainly had its problems. 0:09:37.720 --> 0:09:40.040 I mean they went down what is retrospect, the wrong 0:09:40.120 --> 0:09:42.400 path in terms of the process technology. And now they've 0:09:42.440 --> 0:09:44.839 been trying to fix that since Pat Gelsinger was put 0:09:44.920 --> 0:09:48.000 in charge and now with Liptu Bhutan, and clearly we're 0:09:48.040 --> 0:09:52.640 seeing that it's more challenging than perhaps investors recognize. 0:09:52.640 --> 0:09:54.640 And I think investors really got ahead of the story. 0:09:54.880 --> 0:09:56.439 You know, they saw the US government come in and 0:09:56.480 --> 0:09:57.920 take a stake and they felt like, you know, that 0:09:58.000 --> 0:10:00.680 put a floor on the stock price to so degree. 0:10:00.840 --> 0:10:02.800 But you know, Intel is in a situation with you know, 0:10:02.840 --> 0:10:06.320 two things coming out on that report. One, they're gross margins. 0:10:06.360 --> 0:10:08.400 You know, you know they beat a little bit, but 0:10:08.440 --> 0:10:11.320 they beat. It's thirty seven point nine percent. I mean, Intel, 0:10:11.720 --> 0:10:15.680 right should have gross margins above sixty percent, given that 0:10:15.679 --> 0:10:18.200 they're one of two suppliers in the PC business. 0:10:18.360 --> 0:10:19.520 Well, Joe, let me. 0:10:19.480 --> 0:10:22.880 Just say whether they should or not, Whether they should 0:10:22.960 --> 0:10:27.320 or not. Historically they had margins of sixty percent, just 0:10:27.360 --> 0:10:28.400 to jump in on that point. 0:10:29.240 --> 0:10:32.240 That's a very good clarification, at very good point. Should 0:10:32.240 --> 0:10:35.040 in terms of market structure. But now you know they're 0:10:35.120 --> 0:10:38.000 trying to play in the AI market and they're well 0:10:38.000 --> 0:10:40.800 behind and now in videos the leaders, So you know, 0:10:40.880 --> 0:10:44.400 look at invideos margins clearly right for competition to. 0:10:44.360 --> 0:10:44.920 Come in there. 0:10:45.640 --> 0:10:48.280 But you know, with their outlook showing that they've sold 0:10:48.280 --> 0:10:50.400 out of their server CPUs, they're going to have a 0:10:50.559 --> 0:10:53.960 weak quarter this quarter. The yields are lower than they 0:10:54.000 --> 0:10:56.600 would like, and it just you know, people look at 0:10:56.600 --> 0:10:58.680 that gross margin and they see it as a really 0:10:58.720 --> 0:11:01.440 important signal of how much progress they're making in a 0:11:01.480 --> 0:11:04.240 complex manufacturing process. And clearly they're not making as much 0:11:04.280 --> 0:11:06.960 progress as investors will like and as the company would like. 0:11:07.360 --> 0:11:09.360 And so I think it's a particularly risky bed. We 0:11:09.400 --> 0:11:12.000 have not owned Intel for clients. We think that the 0:11:12.320 --> 0:11:15.480 opportunity cost is just too high. You can own a Broadcom, 0:11:15.520 --> 0:11:17.640 which we've owned for you know, eleven years for clients. 0:11:17.720 --> 0:11:21.080 You can own Nvidia, which we've owned for clients since 0:11:21.120 --> 0:11:24.600 twenty twenty two. These are clearly market leaders, and they've 0:11:24.760 --> 0:11:28.720 ironed out the design challenges and through their partners to 0:11:28.800 --> 0:11:32.320 like TSMC, the manufacturing challenges, and so they're delivering. And 0:11:32.600 --> 0:11:34.680 Intel faces now are chicken and an egg problem on 0:11:34.679 --> 0:11:36.240 the fourteen A process. 0:11:36.600 --> 0:11:39.959 Go there on the foundry side there for Joanne, because 0:11:40.320 --> 0:11:43.600 the signals that maybe well, that side of the equation 0:11:43.720 --> 0:11:45.920 still needs more than just the government buying in to 0:11:45.920 --> 0:11:48.560 think that they're going to solidify any partners here and 0:11:48.760 --> 0:11:50.720 building and manufacturing for them. 0:11:51.080 --> 0:11:51.280 Yeah. 0:11:51.480 --> 0:11:53.240 Intel's tried to enter the foundery world. 0:11:53.320 --> 0:11:56.000 We've talked in the past about you know how challenging 0:11:56.000 --> 0:11:57.960 that is to move from producing your own ships to 0:11:58.000 --> 0:12:01.120 move to producing others. The design libraries and all that, 0:12:01.160 --> 0:12:04.679 but they fundamentally need the manufacturing process. And the problem 0:12:04.679 --> 0:12:06.839 that they face right now is that, on the one hand, 0:12:06.840 --> 0:12:08.640 they're saying, hey, we don't want to invest the cap 0:12:08.920 --> 0:12:11.440 x to build up this capacity until we have customers 0:12:11.440 --> 0:12:14.000 locked in. But customers aren't going to lock in unless 0:12:14.000 --> 0:12:16.440 they know they have a manufacturing process that works and 0:12:16.520 --> 0:12:18.880 that can deliver. Because you know, you're designing a product, 0:12:19.000 --> 0:12:22.320 you're designing it years out, and you have to know 0:12:22.400 --> 0:12:24.560 the supply will be there if you commit to a 0:12:24.559 --> 0:12:25.880 certain manufacturing partner. 0:12:26.200 --> 0:12:27.840 So it's a real chick out an egg problem. 0:12:27.920 --> 0:12:31.959 They might have to bet on, you know, on making 0:12:32.040 --> 0:12:35.240 it happen and being able to deliver the customers by 0:12:35.280 --> 0:12:37.679 getting that process up and running and showing that they 0:12:37.679 --> 0:12:40.760 can get yield up in volume even in advance of 0:12:40.840 --> 0:12:42.239 locking down some customers. 0:12:42.640 --> 0:12:45.280 So you know, it's almost a bet the company kind 0:12:45.320 --> 0:12:45.720 of problem. 0:12:45.760 --> 0:12:48.840 And that's why again, as an investor, we're not enthusiastic 0:12:48.840 --> 0:12:49.400 about Intel. 0:12:49.480 --> 0:12:50.800 The risk is simply too high. 0:12:50.800 --> 0:12:54.200 We don't find the current valuation compelling given that risk. 0:12:54.280 --> 0:12:56.520 We think there are better places to be and so 0:12:56.559 --> 0:12:57.360 we're gonna We're. 0:12:57.200 --> 0:13:00.880 Gonna stick with with where we are. For example, and 0:13:01.000 --> 0:13:01.319 am D. 0:13:01.440 --> 0:13:04.880 By the way, that recent result pretty clearly indicated that 0:13:04.960 --> 0:13:08.640 am D is continuing to gain share against Intel, likely 0:13:08.679 --> 0:13:12.240 both in server CPU and in PCCPU. 0:13:12.600 --> 0:13:15.920 Joanne Feeni with all the context Advisors Capital Management, thank 0:13:15.960 --> 0:13:16.480 you so much. 0:13:16.480 --> 0:13:19.160 Happy weekend. Now coming up, Tesla's. 0:13:18.800 --> 0:13:22.959 Robotaxi gets closer to fully autonomous reality is some vehicles 0:13:23.040 --> 0:13:25.920 in Austin feature no human safety monitors in the car. 0:13:26.320 --> 0:13:29.400 While on that next as a Roomberg technology roombog tech, 0:13:37.880 --> 0:13:40.720 so Tesla has begun offering robotaxi rides in a limited 0:13:40.800 --> 0:13:43.600 number of vehicles in Austin with no human safety driver 0:13:43.640 --> 0:13:44.320 behind the wheel. 0:13:44.600 --> 0:13:47.080 In a post on x CEO in a Musk when even. 0:13:47.000 --> 0:13:50.320 Further suggesting that cracking real world self driving technology could 0:13:50.400 --> 0:13:54.800 ultimately lead to artificial general intelligence, Thomas really unpack what 0:13:54.840 --> 0:13:57.559 this moment means for the future of autonomous technology. We're 0:13:57.600 --> 0:14:00.880 joined by Regina Klulo, Managing director of Populace. 0:14:00.920 --> 0:14:02.319 Regina brings more. 0:14:02.160 --> 0:14:04.720 Than a decade of hands on experience and transportation and mobility. 0:14:04.760 --> 0:14:07.080 Look your hold on PhD in transportation and energy systems. 0:14:07.320 --> 0:14:09.400 My team, we should listen to you. Is this a 0:14:09.400 --> 0:14:09.840 big feat? 0:14:11.480 --> 0:14:16.400 This is definitely a significant development it's another major player 0:14:16.480 --> 0:14:19.840 in the autonomous vehicle space, and it shows more confidence 0:14:19.840 --> 0:14:24.280 in the technology, but it's still pretty limited and it's 0:14:24.320 --> 0:14:25.640 definitely an experiment. 0:14:26.080 --> 0:14:28.000 It's an experiment, Regina. I'm just going to jump in. 0:14:29.240 --> 0:14:31.960 People on the Tesla side of the camp say, this 0:14:32.040 --> 0:14:34.680 is a notable moment because it's a first for a 0:14:34.800 --> 0:14:38.200 vision only based platform to be on public roads, not 0:14:38.280 --> 0:14:40.400 just with no one in the driver's seat, but no 0:14:40.560 --> 0:14:44.400 supervising attendant in the passenger seat either. People would also 0:14:44.480 --> 0:14:47.520 note that there were other restrictions on social media. For example, 0:14:48.000 --> 0:14:51.080 there were support vehicles from Tesla. It is alleged and 0:14:51.120 --> 0:14:54.760 claimed that said the vision only part, the distinction that 0:14:54.800 --> 0:14:58.280 Tesla's system relies only on cameras, whireas Weimo has a 0:14:58.360 --> 0:15:03.720 multi sensor suite. Interpretation of why that's significant, well, I. 0:15:03.640 --> 0:15:06.760 Think there are a couple of companies, including Zookes and Tesla, 0:15:06.920 --> 0:15:10.600 that are really designing vehicles that are intended to be 0:15:11.880 --> 0:15:15.760 purpose built for autonomous driving and for autonomous right hailing. 0:15:16.000 --> 0:15:19.480 So it is the significant development, and I think at 0:15:19.520 --> 0:15:21.560 the end of the day, what's great is that there 0:15:21.560 --> 0:15:25.360 are multiple players that are entering the market, which ultimately 0:15:25.400 --> 0:15:27.440 for cities is a good thing because it makes the 0:15:27.480 --> 0:15:30.000 regulatory landscape easier for them to manage. 0:15:31.000 --> 0:15:35.680 Regulatory landscape has not held back other competitors to this point. 0:15:35.760 --> 0:15:39.000 And when you think about a few a handful of 0:15:39.080 --> 0:15:41.040 Tesla's on the road and you compare that to a 0:15:41.080 --> 0:15:44.920 million rides or having per month already using weimo, and 0:15:44.920 --> 0:15:47.800 they're aiming it for a million per week, how much 0:15:47.800 --> 0:15:50.720 are we able to really say that Tessa's winning here 0:15:50.800 --> 0:15:51.000 or not. 0:15:53.200 --> 0:15:56.640 I think it's still very early days, but the landscape 0:15:56.720 --> 0:15:59.840 is moving much more quickly, especially over the last three years. 0:16:00.080 --> 0:16:02.680 You see these new players entering the market with commercial 0:16:02.760 --> 0:16:06.360 right hailing services, But I don't think that you know, 0:16:06.440 --> 0:16:09.600 it's clear that there's any one winner at this point 0:16:09.600 --> 0:16:13.240 in time. Although weimo is significantly ahead at the moment 0:16:13.280 --> 0:16:15.920 in terms of commercial right hailing, as you mentioned, they're 0:16:16.520 --> 0:16:19.560 estimating to reach a million rights per week by the 0:16:19.640 --> 0:16:23.280 end of the year, but it's still anyone's market to win, 0:16:23.880 --> 0:16:25.640 and it's exciting to see more players enter it. 0:16:26.480 --> 0:16:26.680 Yeah. 0:16:26.720 --> 0:16:29.880 In simple terms, people define Weimo being ahead by the 0:16:29.960 --> 0:16:33.280 number of cities it's deployed in without any human supervision 0:16:33.320 --> 0:16:36.440 in the car and charging affair to passengers. I'd love 0:16:36.480 --> 0:16:38.120 to talk about the human side of this though, right 0:16:38.160 --> 0:16:40.880 in your research at a number of academic institutions over 0:16:40.920 --> 0:16:43.240 the years, do we have the evidence yet that the 0:16:43.320 --> 0:16:47.880 general population feels ready to jump in a robo taxis 0:16:47.920 --> 0:16:49.720 their sort of chosen method of transfer. 0:16:51.280 --> 0:16:52.000 I think that. 0:16:52.440 --> 0:16:55.560 In San Francisco there's a lot of data to suggest 0:16:55.680 --> 0:17:02.040 that consumers do really feel comfortable utilizing Weimo and sort 0:17:02.080 --> 0:17:05.040 of segments of customers preferring Weimo and even being willing 0:17:05.040 --> 0:17:08.639 to pay more for that vehicle over let's say an 0:17:08.680 --> 0:17:12.920 Uber or Lyft. So I think that people are becoming 0:17:13.400 --> 0:17:16.960 very comfortable, very quickly with these vehicles, and we'll just 0:17:17.000 --> 0:17:19.440 continue to see that happen Regina. 0:17:19.480 --> 0:17:21.919 What's interesting is the global context. 0:17:21.520 --> 0:17:24.800 Because we saw actually shares of Uber and Lyft get 0:17:24.880 --> 0:17:29.280 hit by this announcement of Elo Musk, and in many 0:17:29.320 --> 0:17:32.640 ways they're already out there, not only partnering in Austin 0:17:32.760 --> 0:17:35.240 with Weimo like Uber, but they're also in China and 0:17:35.280 --> 0:17:38.960 we're seeing Beijing people hopping in those cars pretty actively. 0:17:39.000 --> 0:17:40.879 We're also seeing it in the Middle East as well, 0:17:41.000 --> 0:17:44.400 with we Ride and Uber out there trying things. How 0:17:44.400 --> 0:17:47.120 are you seeing globally the readiness of the consumer. 0:17:48.720 --> 0:17:51.680 I think that a lot of the global readiness is 0:17:52.240 --> 0:17:56.960 pretty accepting. We have a lot of other countries out 0:17:56.960 --> 0:18:01.040 there that we'll be willing to allow more vehicles and 0:18:01.240 --> 0:18:06.560 more operators to experiment, and then putting those vehicles out 0:18:06.560 --> 0:18:11.040 there for consumers to begin adopting allows them to move 0:18:11.040 --> 0:18:13.880 forward more quickly. So I think that, you know, at 0:18:13.880 --> 0:18:17.160 a global level, we're going to continue to see an 0:18:17.200 --> 0:18:20.320 acceleration of the adoption of those vehicles. 0:18:20.320 --> 0:18:22.680 Regina Klulo of Populous, Great to have you on the show, 0:18:22.720 --> 0:18:31.280 Thank you very much. Okay, So Apple's basically flat in 0:18:31.359 --> 0:18:33.720 the session, but actually it had a pretty rough start 0:18:33.800 --> 0:18:36.280 to the week. And believe it or not, this is 0:18:36.280 --> 0:18:40.160 a stock that's on track for its eighth straight weekly decline, 0:18:40.200 --> 0:18:43.640 the worst run of weekly declines going back to May 0:18:44.080 --> 0:18:45.240 of twenty twenty two. 0:18:45.400 --> 0:18:46.960 There is a lot in the news. 0:18:46.720 --> 0:18:49.720 Cycle with Apple, and a lot of it comes from Bloomberg. 0:18:49.760 --> 0:18:52.560 The company's hardware chief, John Turnas, has added one of 0:18:52.560 --> 0:18:57.000 the iPhone maker's most critical functions and prestigious responsibilities to 0:18:57.040 --> 0:19:00.520 his role overseeing the design teams. It's a new sign 0:19:01.000 --> 0:19:04.440 that Turnus is a leading contender to take over for 0:19:04.560 --> 0:19:07.440 CEO Tim Cook one day all according to our sources 0:19:07.480 --> 0:19:09.959 and the guy that broke the story, plumost Mark German 0:19:10.080 --> 0:19:13.239 is here introduce us to mister Turners. What does your 0:19:13.240 --> 0:19:16.720 reporting tell us about his new workload? And also that 0:19:17.200 --> 0:19:18.960 signal that he's climbing the ranks here. 0:19:20.240 --> 0:19:23.800 John Turnis has been Apple's Senior VP of Hardware Engineering 0:19:23.840 --> 0:19:27.080 since twenty twenty one. That means he runs all hardware 0:19:27.119 --> 0:19:30.359 development for essentially every Apple products. He's in charge of 0:19:30.359 --> 0:19:33.040 the iPhone, charge of the iPad, and charge of the Mac, 0:19:33.160 --> 0:19:35.359 now in charge of the Apple Watch, and he's been 0:19:35.400 --> 0:19:38.479 elevated to expand his role this year a couple times, 0:19:38.520 --> 0:19:41.280 taking like I said, full oversight of the Apple Watch, 0:19:41.320 --> 0:19:45.080 but also taking charge of Apple's AI robotics teams. Now 0:19:45.280 --> 0:19:48.520 very recently, Tim Cook put them in charge of overseeing 0:19:48.560 --> 0:19:51.399 Apple's design teams for both hardware and software. And no 0:19:51.560 --> 0:19:54.159 design is the look and feel of the products, what 0:19:54.200 --> 0:19:56.840 the interface looks like, what the icons look like, how 0:19:56.880 --> 0:20:00.399 the software works. Industrial design are things like the shapes 0:20:00.440 --> 0:20:02.840 of the devices, the colors, the weight in the field 0:20:03.200 --> 0:20:06.280 goes well beyond the engineering of making everything work. And 0:20:06.320 --> 0:20:08.960 like you said, design is one of the most critical 0:20:08.960 --> 0:20:12.359 and prestigious functions at Apple. It's really only been run 0:20:12.400 --> 0:20:16.439 by the most senior executives in the company's history, people 0:20:16.520 --> 0:20:20.520